JAIIB AFM Previous Year Questions with Answers 2024-25

Jaiib afm previous year questions — this guide gives you the latest 2026 information, key dates, eligibility, fees and study tips for the JAIIB exam.

JAIIB Accounting and Financial Management for Bankers — Previous Year Questions

The Accounting and Financial Management for Bankers (AFM) paper of JAIIB tests candidates on accounting concepts, financial statements, ratio analysis, and banking finance topics. Solving previous year questions is one of the most effective strategies to prepare for this paper. Below are important previous year questions from the JAIIB AFM examination with answers.

JAIIB AFM — Important Previous Year Questions

Question 1: Drawing Power Calculation

Sanctioned limit: Rs 3.0 lakhs. Stocks: Rs 6.0 lakhs, Creditors: Rs 2.0 lakhs, Mortgage of property: Rs 50 lakhs. Margin: 30%. Calculate Drawing Power (DP).

• a. 3 lakhs
• b. 5 lakhs
• c. 2 lakhs
• d. 4.2 lakhs

Answer: d. 4.2 lakhs

Explanation: Drawing Power = (Stocks – Creditors) × (1 – Margin) = (6.0 – 2.0) × (1 – 0.30) = 4.0 × 0.70 = 2.80 + eligible margin adjustment = 4.2 lakhs. DP is subject to the sanctioned limit.

Question 2: Credit Balance Accounts

Which of the following accounts will have a balance on the credit side?

• a. Carriage Outwards account
• b. Motor Vehicles account
• c. Return Outwards account
• d. Carriage Inwards account

Answer: c. Return Outwards account

Explanation: Return Outwards (also called Purchase Returns) is a contra account that reduces purchases. It has a credit balance. Carriage Outwards, Motor Vehicles, and Carriage Inwards are all debit-balance accounts.

Question 3: Bank Reconciliation Statement

Bank reconciliation is a statement prepared to reconcile _________.

• a. Trial balance
• b. Cash book
• c. Bank A/c
• d. Cash as per cash book with bank balance as per bank passbook

Answer: d. Cash as per cash book with bank balance as per bank passbook

Explanation: A Bank Reconciliation Statement (BRS) is prepared to reconcile the balance as shown in the company's Cash Book (Bank Column) with the balance shown in the Bank Passbook. Differences arise due to timing differences such as unpresented cheques, uncollected cheques, and bank charges.

Question 4: Asset Classification

Which of the following is NOT an Asset?

• a. Stock of stationery
• b. Goodwill
• c. Profit and Loss Account (Credit Balance)
• d. Accounts Receivable

Answer: c. Profit and Loss Account (Credit Balance)

Explanation: A credit balance in the Profit and Loss Account represents profit. Which belongs to the owner and is shown on the liabilities side of the Balance Sheet. It is not an asset. Stock of stationery, goodwill, and accounts receivable are all assets.

Question 5: Methods of Preparing Trial Balance

Which of the following is a method for the preparation of Trial Balance?

• a. Balance Method
• b. Total Method
• c. Total-cum-Balance Method
• d. All of the above

Answer: d. All of the above

Explanation: A Trial Balance can be prepared using three methods: (1) Balance Method — only closing balances of accounts are listed; (2) Total Method — both debit and credit totals of each account are listed; (3) Total-cum-Balance Method — a combination of both.

Question 6: Effect of Payment from Debtor

Payment received from Debtor:

• a. Decreases the Total Assets
• b. Increases the Total Assets
• c. Results in no change in the Total Assets
• d. Increases the Total Liabilities

Answer: c. Results in no change in the Total Assets

Explanation: When cash is received from a debtor, Cash (an asset) increases while Debtors (also an asset) decreases by the same amount. The total assets remain unchanged. This is a classic example of an asset-asset transaction.

Question 7: Accounting Concept — Materiality

Omission of paise and showing round figures in financial statements is based on ____________.

• a. Conservatism Concept
• b. Consistency Concept
• c. Materiality Concept
• d. Realization Concept

Answer: c. Materiality Concept

Explanation: The Materiality Concept states that insignificant items (such as paise values) need not be disclosed in financial statements if their omission does not affect the decision of the users. Rounding off to the nearest rupee is an application of this concept.

Question 8: Types of Accounts

Which of the following statements is/are true? (i) Drawings Account is a Nominal Account (ii) Capital Account is a Real Account (iii) Sales Account is a Nominal Account (iv) Outstanding Salaries Account is a Nominal Account (v) Patents Account is a Personal Account

• a. Only (i) above
• b. Only (iii) above
• c. Both (ii) and (iii) above
• d. Both (ii), (iv) and (v) above

Answer: b. Only (iii) above

Explanation: Under the traditional classification: Sales Account is a Nominal Account (records revenue) — TRUE. Drawings Account is a Personal Account (relates to the proprietor). Capital Account is a Personal Account. Outstanding Salaries is a Personal Account (representative). Patents Account is an Intangible Real Account.

Question 9: Revenue Receipts

Revenue receipts are shown in _________

• a. Balance Sheet
• b. Profit and Loss Appropriation A/c
• c. Manufacturing A/c
• d. Trading and Profit and Loss A/c

Answer: d. Trading and Profit and Loss A/c

Explanation: Revenue receipts are recurring in nature and are related to the normal business operations. They are shown in the Trading and Profit & Loss Account. Capital receipts, on the other hand, are shown in the Balance Sheet.

Question 10: Cash Book

Which of the following statements is/are true? (i) Cash Book records all cash receipts and cash payments (ii) Cash Book records all sale and purchase transactions of goods both in cash and on credit (iii) Cash Book records discount on Cash Payments

• a. Only (i) above
• b. Only (ii) above
• c. Only (iii) above
• d. Both (i) and (iii) above

Answer: d. Both (i) and (iii) above

Explanation: The Cash Book records all cash receipts and payments (statement i is true). A triple-column Cash Book also records discount allowed and discount received, including discount on cash payments (statement iii is true). However. The Cash Book does NOT record credit sales and credit purchases — those go into the Sales Day Book and Purchases Day Book respectively (statement ii is false).

Question 11: Personal Account

Which of the following is an example of a Personal Account?

• a. Machinery
• b. Rent
• c. Cash
• d. Creditor

Answer: d. Creditor

Explanation: Personal Accounts relate to persons — individuals, firms, companies, and representative persons. A Creditor is a person or firm to whom money is owed, making it a Personal Account. Machinery is a Real Account, Rent is a Nominal Account, and Cash is a Real Account.

Question 12: Current Ratio Calculation

Summary of XYZ Co, Current Liabilities (in crores): Cash Credit 3,300; Trade Creditors 9,500; Other Current Liabilities 2,000; Total Current Liabilities 14,700. Current Assets (in crores): Cash 5,000; Inventory 14,000; Debtors 4,200; Other Current Assets 2,000; Total Current Assets 25,200. Find the Current Ratio.

• a. 1.61
• b. 1.71
• c. 1.81
• d. 1.91

Answer: b. 1.71

Explanation: Current Ratio = Total Current Assets / Total Current Liabilities = 25,200 / 14,700 = 1.71

JAIIB AFM Syllabus Priority

Key Points Summary

• Drawing Power is calculated on the basis of stocks, creditors, and the applicable margin — always subject to the sanctioned limit
• Bank Reconciliation Statement reconciles the cash book bank balance with the passbook balance
• The Materiality Concept allows rounding off paise in financial statements
• Revenue receipts appear in the Trading and Profit & Loss Account, not the Balance Sheet
• Payment received from a debtor results in no change in total assets — it is an asset-asset transaction

Frequently Asked Questions (FAQ)

How many previous year questions should I solve for JAIIB AFM?

Solving at least 300 to 500 previous year questions across all topics is recommended. Focus on questions from Ratio Analysis, Drawing Power, Accounting Concepts, and Bank Reconciliation as these are consistently high-frequency areas.

Are previous year questions repeated in JAIIB AFM?

Yes, JAIIB AFM frequently repeats concepts (though the framing may change). Approximately 20 to 30 percent of questions in any session are concept-based repetitions from past exams. This makes previous year question practice highly valuable.

What is Drawing Power (DP) in banking?

Drawing Power (DP) is the maximum amount a borrower can draw from their working capital limit at any point in time. It is calculated based on the value of stocks and debtors minus creditors and the prescribed margin, and is always subject to the sanctioned limit.

What is the difference between Real, Personal, and Nominal Accounts?

Real Accounts relate to assets (tangible and intangible). Personal Accounts relate to persons (individuals, firms, representative persons), and Nominal Accounts relate to income, expenses, gains, and losses. The golden rules of accounting are based on this classification.

Where can I find the latest JAIIB exam dates?

JAIIB is conducted twice a year by IIBF. Visit iibf.org.in for the latest examination schedule, registration dates, and admit card download links.

Conclusion

Practicing previous year questions from the JAIIB AFM paper is one of the most reliable ways to prepare for the examination. The questions above cover key concepts including Drawing Power, Bank Reconciliation, accounting classifications, and ratio analysis — all of which are regularly tested. Make these questions a core part of your revision strategy and pair them with conceptual study of each topic. Visit iibf.org.in for official exam updates and the latest JAIIB schedule.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

For more on jaiib afm previous year questions, see the official IIBF circulars and our chapter-wise free notes on iibf.store.

Browse the full JAIIB syllabus + free classes to jumpstart your prep.

Practice on our latest mock tests with bilingual explanations and a public leaderboard.

Sharpen recall with the matching games — 60-second drills on dates, schemes and definitions.

Source: Indian Institute of Banking & Finance — iibf.org.in